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Facebook, Inc. (NASDAQ:FB) Urged To Sell Instagram and WhatsApp

Facebook is yet again under immense pressure to spin-off its most priced assets, Instagram and WhatsApp. Federal and state authorities are pushing for the divestment, which they say will help trim the sector’s social networking giant’s dominance.

Facebook’s Antitrust Allegations

In a wave of state and federal lawsuits, the Federal Trade Commission and 48 Attorney Generals allege that the tech giant is illegally stifling competition in the sector. The suits are part of lawmakers’ and regulators’ ongoing scrutiny, targeting tech giants at the heart of American lives.

Facebook’s scrutiny stems from growing concerns; it is not doing much to protect U.S citizen’s privacy. Regulators insist that the company is also complacent in combating the spread of online lies. Last year, the company was hit with a $5 billion fine on allowing consultancy firm Cambridge Analytica to harvest U.S citizen’s data without their knowledge.

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In the latest lawsuit, the FTC is taking the tech giant to task over what it claims to be anti-competitive practices designed to hold on to monopoly power. Some of the practices that the regulators allege the tech giant uses include purchasing rivals billed to pose a significant danger rather than competing with them.

The FTC has also challenged Facebook’s acquisition of Instagram for $1 billion and WhatsApp for $19 billion. According to the regulator, the acquisitions have left consumers with fewer choices while also fueling poor privacy protection.

European Scrutiny

U.S regulators are not the only ones ramping up scrutiny on the networking giant. European antitrust authorities have also set sights on U.S multinationals, which they say are crippling competition in their respective field.

Alphabet Inc. (NASDAQ: GOOGL) has already been hit with fines in Europe over what European authorities claim to be abusive practices in search and online advertising. Amazon.com Inc. (NASDAQ:AMZN) has also elicited interest from authorities over the way it gathers customer’s data and uses it to stifle competition on e-commerce.

The tech giants have hit back with Facebook reiterating its plans to fight the cases. CEO Mark Zuckerberg insists that Facebook competes with many other services fairly.

Ruchi Gupta

Ruchi Gupta covers various beats from finance to technology and from lifestyle to hobbies. She has an MBA in Finance. Ruchi enjoys writing on celebrities and political news. She likes traveling and exploring places.

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